BOB GARFIELD This is On the Media, I'm Bob Garfield. We've just heard so much foreshadowing involving New Deal era compromises in labor law, health care provision, worker solidarity, civil rights and compensation of at home work. In this next act, plot lines merge. And as Ronald Reagan bluntly foretold, out of a disintegrating industrial economy emerges a very different one. Gabriel Winant, University of Chicago historian and author of The Next Shift, offers a parable from Braddock just up the Monongahela River from Pittsburgh. Siblings Erline Colburn and Lou Berry grew up there in the 60s with every expectation that the world, as they knew it, would endure.
GABRIEL WINANT But by the time it was Lou's turn to look for that work, it wasn't there anymore. He got another factory job working for Westinghouse, briefly. Then he got laid off from there. He was on the margins of the economy for a while, and eventually he got a job working for a hospital and his sister Erline married a steelworker. Then the same thing hit her family, too. And after some time doing this and that, like her brother, she also wound up working for the hospital.
BOB GARFIELD You graphed the numbers of people employed in metal production and health care and social assistance between 1950 and 2010 in Pittsburgh. And your graph looks like an X, a near perfect inverse correlation between mill workers and hospital orderlies, with the two sectors crossing paths around 1980.
GABRIEL WINANT Yeah, Coburn and Berry are flesh and blood data points of that in that they come from a world where you can expect steel work and they're perfectly reasonable for thinking that world will continue. But they happen to live in the wrong moment for that. They happen, to live in the moment when one line crossed the other. They had to figure out how to navigate off of the old path and onto the new one.
BOB GARFIELD There's another crossroads I want to talk about. Earlier, we alluded to a seeming anomaly in the creation of the proto-welfare state pursuing not government run infrastructure such as Medicare it would eventually achieve, but an employer based health insurance system. But that strategy intersected fatefully with another quirk of the times. The classification of hospital workers as something other than employees.
GABRIEL WINANT Well, I think there's a couple of levels at which we want to understand that, one is cultural. Hospital work, like lots of different kinds of intimate work, work that generally has been assigned historically to women, has been seen as dirty in some way or saintly in some way, by one way or another is not just kind of part of the regular economy. That goes way, way back. That goes back to slavery, to domestic servants in the 19th century, to Florence Nightingale. And it goes back to the idea that the family is a kind of sacred space untainted by commerce. All of that informs the structure of the healthcare industry as it's taking off, and it's part of the reason why health care institutions were expected to be not for profit, to be philanthropic. The same expectation was that mirrored for those who worked for them.
NEWS REPORT Hospital employees were among the most underpaid workers in the country. Whether they were nurses or kitchen employees. These workers used to be encouraged to think of themselves as dedicated angels of mercy. [END CLIP]
GABRIEL WINANT So those things together explain why going back to the 30s and 40s, health care got excluded like domestic service got excluded from the protections of labor and employment law, such as minimum wages and unionization rights.
BOB GARFIELD In 1940, when health care workers at Western Penn Hospital in Pittsburgh sought to form a union, 26 hospitals in the region ended up joining West Penn in opposing the unionization, and the hospitals prevailed. What did the decision augur for the future of health care work?
GABRIEL WINANT It predicted the logic by which health care work would be codified and institutionalized as outside of the economy, as philanthropic, as charitable. And that got written into labor law, and it meant that the whole health care industry then got built up as a kind of adjunct to service. The insiders, the people whose work was recognized, which was secure, who did have that good insurance.
BOB GARFIELD This something less than employee status wound up enshrined in the Taft Hartley Act, and as recently as 2013, the University of Pittsburgh Medical Center, UPMC, was telling federal regulators that the tens of thousands of workers had claims on its website are not employees, at all. Meantime, for Earline and Lou and thousands of others, these divisions of labor often broke down along racial lines. The X industrial workers in the not so great migration to health care were often the African-Americans who'd been marginalized in the mills. And that racial aspect of downward mobility did not go unnoticed. Here as Martin Luther King Jr. in 1968, shortly before his assassination, talking to New York health care workers.
MARTIN LUTHER KING JR. I can remember just a few years ago, right here in this city, that hospital workers made wages so inadequate that it was a shame to say to anybody these people were being paid. [END CLIP]
BOB GARFIELD Dr. King was speaking to the Local 1199, which went on to spearhead organizing efforts in Pittsburgh hospitals. How did that campaign play out?
GABRIEL WINANT That campaign emerged out of a group of kind of militant hospital workers in New York in the 60s who saw the opportunity to take their union national. They began trying to organize in 1969 and 1970 hospitals up and down the East Coast and across the Midwest, but crucially without the protection of labor law. So what labor law does is it gives employees a set of mechanisms for, in theory, compelling an employer to deal with that. You hold a vote. If you win the vote for the union, the boss has to bargain. You can try to force your employer to do that without those rules. But it's kind of the Wild West. That's what Local 1199 was going to have to do. And the theory was these workers who were making such low wages had worked in such poor conditions and were to such great degree African-American especially, or in New York also Puerto Rican and other kinds of immigrant groups would be militant because of the experience of the civil rights movement and the way that it, combined with their economic situation, just their own militancy in action and organization, could overwhelm the employer. Even if you didn't have the law on your side. This worked in a lot of cases. It worked in New York, Philadelphia and Baltimore. It did not work famously in Charleston. South Carolina is a fantastic film about this called I am Somebody.
PROTESTER More than a thousand of us went to jail during strike. I was in jail twice, my kids were in jail too.
[CHANTING IN BACKGROUND] I am somebody! Somebody, I am! I am somebody! [END CLIP]
GABRIEL WINANT But what they found in Pittsburgh was that there weren't enough African-American workers relative to the white workers who were not compelled by this strategy, particularly when the employer began firing activists, began race baiting the union, began using all of the tools that an employer can use if they're not constrained by labor law, These kind of weapons that you couldn't use in a steel mill. And so this campaign to organize the hospitals in Pittsburgh failed.
BOB GARFIELD Meanwhile, the industry was booming. In the midst of larger regional financial devastation, this was kind of counterintuitive, wasn't it?
GABRIEL WINANT Once you had Medicare and Medicaid passed in '65, plus you had these really good insurance plans for industrial workers who are starting to reach retirement. The things that put people in the hospital beds are detached and maybe even run opposite to the normal signs of economic prosperity, right. So people getting old. It's not necessarily good for the economy as a whole under this system, but it's good for hospitals. People getting poor. Perversely, they might fall under Medicaid coverage and health care will be one thing that they can still buy. And people getting sick, you know, obviously is going to drive consumption, so people could check in their dad. Maybe his daughter can't look after him right now because she had to go get a job. They check him in for his chronic pain that he has. And the hospital hangs on to him for a couple of weeks, sort of almost like a nursing home. That was good money for these Steeltown hospitals, for decades,
BOB GARFIELD Hyper expansion was financed directly and also indirectly by the government. How so?
GABRIEL WINANT So there's two ways. The direct way is that hospitals under Medicare can pass through their capital costs to a significant degree for reimbursement. If you're going to get paid back for building more, you should probably build more. Historically, they had recruited donations and these kinds of things for capital expansion, but in the 70s, hospitals realized we should just borrow that money. And policymakers tried to give them ways of doing that because it's good for policymakers if the hospital system is growing and building a new wing and their constituents get new services. So, hospitals get access to municipal bond markets, which are subsidized right there untaxed. And a hospital is a pretty safe investment for a creditor, especially a hospital in a place like Pittsburgh between Medicare and Blue Cross and Medicaid. You have a pretty good sense that this hospital is going to be able to make its bond payments.
BOB GARFIELD So the game was rigged in favor of big hospital holding companies. Meantime, average pay was what, relative to minimum wage?
GABRIEL WINANT Well, minimum wage comes into effect in health care at the end of the 1960s. And so, you know, at the bottom of the health care hierarchy, people start to make just above minimum wage. In the early 70s, the union campaigns, even where they don't succeed, manage to drive up wages a little bit. Typically, you know, managers kind of want to throw them a bone, but it's common for people to be making in the 1970s a couple of bucks an hour at the bottom of the wage scale, and that stretches all the way up to doctors, obviously, who make more. It's a very, very stratified industry.
BOB GARFIELD And work schedules, job security?
GABRIEL WINANT Oh, none of that at this point. Some of the kind of greater instability in terms of work schedules and job security, that stuff would get more destabilized in the future in the 80s and 90s and up to the present. But even in the 70s, because there is so little formal protection in this industry, people are quite vulnerable on all these dimensions.
BOB GARFIELD But as the industry mushroomed, it continued to be viewed as a community service based on the habits and spirit of care ingrained, as we've discussed in the region's working class culture. But to me, it sounds like these massive organizations just expropriated the communitarian ethos of the culture as a pretext for naked exploitation. Am I going to Eugene Debs here?
GABRIEL WINANT Well, I don't think it's too - nothing is too Eugene Debs for me, but, you know, I think that the way to understand it is there's a period of time in the 1970s when a lot of people are getting what they want out of the healthcare industry. But you have these people who have this good insurance and they're getting a lot of services out of it, and you have these administrators who are realizing, you know, we could run this hospital a little bit more like a profitable corporation that we might have thought in the past. Let's borrow some money, let's expand a little bit, medicare will pay the bills. So, it's meeting a lot of different kinds of needs all at once, making a lot of different kind of constituencies happy. Even as Pittsburgh is kind of in ruins. Hospitals are borrowing and growing and borrowing and growing. As that happens on a national scale, it starts to freak out policymakers in Washington.
RONALD REAGAN Yes, we're doing everything. We can to cut waste and root out cheaters, but there are only two budgets in the world larger than our '83 Health and Human Services budget of 274.2 billion dollars. The total budget for the United States and the Soviet Union. [END CLIP]
BOB GARFIELD Reform is needed. And in 1983, this "reform," and I guess I have to use quotes there was enshrined in law.
NEWS REPORT The president of the United States today celebrated a bipartisan triumph on Social Security, one he could not have won without the help of Democrats. [END CLIP]
GABRIEL WINANT From the passage of Medicare in 1965 until 1983, the way that providers got paid by the government was called retrospective. That's to say they did what they thought was required by the case. Then they basically sent a bill to Washington saying, OK, here's what that cost. Give us 102 percent of that.
BOB GARFIELD Cost-plus.
GABRIEL WINANT Cost-plus Congress put a stop to that in 1983. They said, OK, we're going to go to a prospective payment. The federal government is going to come up with a list of five hundred diagnoses. You know, when you admit a patient to a hospital, you pick which diagnosis they have and you'll see what the price is for it. You can treat them however you want. You keep them for a day, you can keep them for a month – that's your problem. You know how much money you getting, any overrun you have to eat. This is great for hospitals that are equipped to do complicated, intensive interventions. So in Pittsburgh, transplants are the kind of classic example of that. That means academic hospitals, their margins go up. But these community hospitals that are across the street from the steel mill in each of the steel towns can't keep someone for two weeks, check in on them every day and feed them and take care of them for a kind of minor complaint in the way that, frankly, you could before. There's no margin in that for them, and what that means is that they all get destabilized and then get bought out.
BOB GARFIELD Now, the Clintons would come along in 4 years to try to reinvent health care financing, but meantime, the society was paralyzed on the horns of what you call a trilemma.
GABRIEL WINANT So the trilemma is a problem that gets faced, I think, structurally by all kinds of deindustrializing societies. It looks like this: when you can increase productivity, then you can generate surpluses, and that's sort of the basis of a golden age in the 50s and 60s. In the Human Services, that's not really possible in the same way. And from the perspective of policymakers, it means that there are three things that they want, of which they can only have two. This is the trilemma. The things that they want are low unemployment, high wages and low public spending. And they can have any two of these three. So if they deregulate the labor market, low minimum wages, low unemployment insurance, weak unions, wages will be low and jobs will probably get created at low wages. And this is what we did in the United States, basically. Right. We created a ton of low wage, crappy jobs, but our unemployment rates are generally lower than they have in Europe, but there were other choices available even within these kind of hard parameters. You can, for example, accept more public spending to take these low productivity service jobs into the public sector where you can pay people more, where there's not this tight link between operating profits and the well-being of employees. That's not the choice we made. We made the choice to make people depend for their survival on this kind of work in ways that have quite brutal consequences.
BOB GARFIELD Coming up, distortions in the marketplace and their human toll. This is On the Media.
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